The Political Economy of Football V2

Atletico Madrid have reached a 10-year strategic agreement with entertainment company Live Nation to stage concerts at their Metropolitano home ground,  The Athletic  has revealed. It comes at a time when city rivals Real Madrid have seen their own plans to hold concerts at their refurbished Santiago Bernabeu stadium curtailed by complaints and legal disputes over noise pollution regulations. Under Atletico’s new deal, between 15 and 20 concerts are expected to be held each year at the Metropolitano, all during the off-season months when there are no competitive club fixtures.   The agreement also includes the option of an extension beyond its 10-year term and is expected to be announced officially in the coming hours. The plan is to use not only the stadium itself but also a new smaller arena that is due to be built alongside it, as well as an existing fan zone just outside the ground, which already has a stage. According to industry sources, Atletico expect to r...

One branch of my family now lives in Spain, but unfortunately none of them are interested in football.   That would be a lot to ask of my great-granddaughter who is three, but I have watched the older pupils from her school (boys and girls) enjoying a kick about in the village square. From his Zurich fastness, the Swiss Ramble has been casting his eye over the finances of Atlético Madrid.    Much more detail and analysis are available on his Substack page.   Some highlights follow. Private equity firm Apollo Sports Capital became majority shareholder in Atlético Madrid last November, buying a reported 55% stake. Following this deal, Quantum Pacific, founded by Israeli billionaire Idan Ofer, is the second largest shareholder with a stake of roughly 25%, while American investment firm Ares Management now has 5%. Gil Marin has seen his stake reduce to 10%, though he will remain as CEO, while club president Enrique Cerezo is down to 3%. Apollo’s investmen...

I t’s been a big few days for Atlético Madrid. Spain’s third-biggest club all but booked a place in the next round of the Champions League after dismantling an abject Tottenham Hotspur on Tuesday night. A couple of days later, the biggest-ever takeover in Spanish football closed, with Apollo completing its purchase of a majority stake in Atlético at a valuation of somewhere north of €2bn (how far north depends on who you ask). Success in Uefa competitions is one of the reasons the club made an attractive prospect for the US investment group The deal was a win for Ares Management, which sold down the 34 per cent stake it had acquired for €182mn in 2021. The firm will continue to be involved as a smaller shareholder in the club, and most likely as a lender for the ambitious €800mn real estate project that first sparked Apollo’s interest (and is probably still the key driver of the decision to buy the club itself). But another big beneficiary was Quantum Pacific, the investment firm of Is...

European football clubs have been left on the sidelines of a deals boom that has highlighted soaring valuations for US sports franchises and underlined the challenges facing Europe’s team owners. Investors argue that a failure to get a grip on costs, as well as the constant threat of relegation, has kept a lid on European interest even as a flurry of deals in the US has underscored rising valuations in several sports. Valuations of the top men’s football teams, which are concentrated in Europe, have stagnated at just 4.2 times revenue. M&A activity in European football has dropped sharply since a spate of record-breaking takeovers in 2022, according to figures from governing body Uefa. Apollo Global Management agreed to buy a controlling stake in Atlético Madrid, Spain’s third-biggest football club, at a valuation of between €2bn and €2.5bn in 2025. The lower end of that range implies a valuation of 4.9 times its 2024 revenue. According to the most recent figures from Uefa, more t...

Sports, crypto billionaires, industrial dynasties, special voting rights and Italian politics: Tether’s bid for Juventus football club stamps every number on the dysfunctional M&A bingo card, argues the Financial Times. . Tether, the biggest issuer of stable coins, has offered to buy the 36-time Italian champions for €1.1bn in cash. It already has an 11.5 per cent stake but picking up the rest requires it to win over the Agnelli family, known for its role in founding carmaker Fiat. The Agnellis have controlled Juventus for more than 100 years. Exor, their holding company, insists the team is not for sale. There are good reasons for family scion John Elkann, who runs Exor, to turn down Tether’s current offer. His company is already under fire from politicians for trying to sell its famous local newspapers; selling another national champion to an 11-year-old crypto company based in El Salvador could bring further political risks. More importantly, the bid is simply too low. Juv...

Apollo is in talks with Atlético Madrid about taking a stake in Spain’s third-biggest football club in a move that would mark a rare foray into sport for the Wall Street investment giant. The talks emerged out of Atlético’s hunt for investors to back an €800mn real estate project next to its stadium, according to one club official. The official told the Financial Times Apollo raised the alternative idea of taking a stake in Atlético Holdco, the company that controls the football club, during discussions over the real estate project. Two of Atlético Holdco’s major shareholders — long-serving chief executive Miguel Ángel Gil Marín, who owns 50.8 per cent, and club chair Enrique Cerezo, who owns 15.2 per cent — are not willing to sell any shares, according to the official. However, the person added that they would be open to issuing new equity to allow Apollo to acquire a stake. A deal could see US private investment group Ares Management, which owns a 34 per cent stake in Atlético’s ...

Atlético’s 2023/24 accounts covered a season when they finished fourth in La Liga, their worst position for 12 years, though they did reach the semi-finals of the Copa del Rey, where they were beaten by Athletic Bilbao, and the quarter-finals of the Champions League, where they were eliminated by eventual finalists Borussia Dortmund. It’s fair to say that the club has performed well in the 12 years since Diego Simeone became head coach in December 2011. Atléti have won the league twice during the Argentinian’s tenure, most recently in 2020/21, while finishing runner-up on two other occasions. In fact, Atlético are the only club that has managed to break up the duopoly of Real Madrid and Barcelona in this period, which is pretty impressive, given the enormous financial advantages enjoyed by Spain’s Big two.    Atlético are stuck in a slightly awkward “inbetweener” position in Spain, as their €395m revenue is miles below the two Spanish giants, Real Madrid €1.1 bln and Barce...

The inspiring Swiss Ramble has been working this weekend on the achievements of Villareal  which reveal a record of good financial management that other clubs could learn from.  Their European achievement To place their achievement in reaching Champions League semi-finals into perspective, their €124m revenue is far below €164m required to be in the top 30 of the Deloitte Money League. Bayern Munich, who they beat in the quarter-finals, have five times as much with €611m. Europe is important to the club strategy, as seen in 2020/21, when the Swiss Ramble estimates they earned €32m for winning the Europa League. Still a lot less than the Spanish representatives in the Champions League received, e.g. Real Madrid got more than three times as much with €111m. They will earn big money from this season’s Champions League. The Swiss Ramble’s model suggests around €78m, though is restricted for two reasons: (a) nothing from first half of TV pool, as qualified via Europa League...

US investment manager Ares Management Corporation has acquired a 34 per cent stake in the holding company and majority shareholder of Atletico Madrid. The move was unanimously confirmed as part of a €181.8 million capital increase of which the firm that owns 66 per cent of Atletico Madrid will contribute about €120 million. The injection of capital is designed to help shore up Atletico’s finances, mitigating what the club described as ‘the adverse economic effects’ on income caused by Covid-19. The La Liga holders also said the funds will ‘reduce the level of indebtedness derived from both the investment in the new stadium and the acquisition of players’. In November 2020, digital soccer outlet Goal reported the club's debt had reached just short of €1billion  following the 2019/20 season.

Atlético Madrid's debt is nearly €1 billion.  However, despite a fall of nearly 10 per cent in revenue, the club still managed to make a profit against the background of the pandemic:  https://www.sportspromedia.com/news/atletico-madrid-debt-2019-2020-broadcast-advertising-revenues-la-liga?_hsmi=101315867&_hsenc=p2ANqtz-_37nY_96enPEavzK-rkQtSqy7vrUKjg469zWcPcFvbq8LuKR-wf2cPVW5NuzC2LxKUikdoXPmWZ5AB_eQsyx9Ha3742gA1Q4cUnmDTIkwdASmUvE4

In a further step towards the globalisation of football, Atletico Madrid have been issued a licence to launch an Ottawa-based club in the Canadian Premier League in time for the team to be included in the 2020 season starting in April. The club will play in the 24,000-capacity TD Place Stadium in the Canadian capital, formerly the home of the now-defunct Ottawa Fury Football Club. For Atletico, it is a relatively low cost way of getting themselves better known internationally, an arena in which Real Madrid have excelled. To make the project possible, Atletico Madrid worked with Jeff Hunt, a Canadian businessman who holds stakes in the Canadian Football League's Ottawa Redblacks and in the Ontario Hockey League's Ottawa 67's. To make way for the club, the Canadian Premier League (CPL) has been expanded from seven to eight teams. This of itself reflects the relative weakness of soccer in Canada. The great Canadian passion is, of course, ice hockey, although women's...

As I struggle in my first steps to learn Spanish, the authoritative and no doubt multi-lingual Swiss Ramble reports with his usual authority on the 2018/19 accounts of Atletico Madrid. Profit before tax almost tripled from €12m to €34m (profit after tax up from €4m to €14m), as revenue rose €71m (23%) to a record €384m and profit on player sales shot up €70m to €86m. The club's profits have been improving with their last loss reported eight years ago in 2011. Since then, they have reported aggregate profits of €73m, including their highest ever surplus of €34m in 2019 (€14m after tax). The main driver of the €71m revenue increase was broadcasting, up €47m (30%) to €205m, mainly due to new Champions League TV deal. Commercial also rose €20m (21%) to €112m, while match day was up €4m (7%) to €66m. Most clubs in La Liga are profitable, but the club's €14m profit after tax is towards the top of the table. In 2018/19 they find themselves between Real Madrid €38m and Barcelona €5...

The authoritative Swiss Ramble has taken a look at the accounts of Atletico Madrid covering their first season in their new stadium. Profit before tax increased from €5m to €12m (after tax down from €5m to €4m), as revenue rose €31m (11%) to a record high of €313m, though profit on player sales fell €20m to €16m. The main driver of the revenue increase was the move to the new stadium, as match day rose €17m (37%) to €62m and commercial was up €17m (22%) to €93m. Broadcasting slipped slightly to €158m, as lower Champions/Europa League distribution offset higher money from La Liga. Revenue has grown by nearly €200m (160%) in just five years from €120m in 2013 to €313m in 2018, largely from TV €107m (split between domestic TV deal and Champions League), then commercial €55m and match day €31m. Revenue mix: TV 50%, commercial 30% and match day 20%. However, the revenue gap to Real Madrid €751m and Barcelona €690m continues to grow and is now €390m-450m. On the other hand, Atletico are ...

The authoritative Swiss Ramble has analysed how much clubs can expect from the Champions League pool. English clubs earned most in total from the 2017/18 Champions League with their five clubs receiving €303m, much more than Spain’s €224m. These were followed by Italy €198m, Germany €140m and France €119m. The TV pool distributed as follows: (a) Half for position in previous season’s domestic league; (b) Half for progress in current season’s Champions League. So, despite their run to the final, Liverpool’s share of TV pool was adversely impacted by finishing 4th in 2016/17 Premier League. English clubs Champions League 2017/18 revenue: Liverpool €78m, Chelsea €64m, Manchester City €62m, Tottenham Hotspur €60m and Manchester United €39m. Also, Celtic €32m, as Scottish clubs get 10% of UK TV pool if they qualify for the Group Stage. As Manchester United qualified via Europa League, they get nothing from first half of TV pool. Spanish clubs Champions League 2017/18 revenue: Real Madrid...